Global investment firm KKR Credit and an undisclosed sovereign wealth fund has finalised a deal to buy $1.5bn worth of shipping loans from German business bank Norddeutsche Landesbank (NORD/LB).
The proposed portfolio of performing and non-performing loans will cover up to 100 ships.
Following the completion of the deal, the buyers plan to establish a shipping portfolio management company.
The new company is designed to be open for use by third-party banks to manage their portfolio.
Subject to certain closing conditions, the deal is expected to complete in the last quarter of this year.
NORD/LB management board chairman Dr Gunter Dunkel said: “The agreement reached with the investors is a significant milestone for the bank as it continues to effectively manage its balance sheet through the ongoing shipping crisis.
“This initial sale clearly demonstrates the bank's ability to attract capital from internationally renowned investors and at the same time yields a very tangible reduction to the bank's shipping exposure."
The bank currently provides structured financing in the energy and infrastructure sector, ship and aircraft financing, corporate businesses, commercial real estate financing, capital market business, and private and commercial customers.
KKR Europe, Africa and Middle East head Johannes Huth said: “This transaction is in line with KKR’s focus on investing in and managing banks’ non-core and under-performing assets.”
The firm manages investments across multiple asset classes such as private equity, energy, infrastructure, real estate, credit and hedge funds.